Creating A Financial Plan

Now that you’ve spent some time figuring out where you are financially and setting goals, the next step:

Creating A Plan.

Plans are the specific actions you take to accomplish your goals.

When I was younger, I loved to complete maze puzzles.  When completing a complicated maze, I found it was usually easier to start at the end and work my way back to the beginning of the puzzle.  The same thing is true for creating plans.  Start at the end with your timeframe or end date and work backwards to the beginning.

Identifying Your Financial Goals

Now that you’ve spent some time figuring out where you are financially, the next step is to figure out Where Are You Going: Identifying Financial Goals.

In my personal experience, most of my financial difficulties were caused because I did not set and follow financial goals.

Goal setting is the foundation of all financial success.  Let me repeat that, GOAL SETTING IS THE FOUNDATION OF ALL FINANCIAL SUCCESS!  Why is that you ask?  Goals are your road map, they are the mental pictures of what you are trying to accomplish.  When you set a goal, become absolutely clear about accomplishing it and don’t deviate from it, you will eventually achieve it.

Assessing Your Financial Situation (Part 2)

In our last post, we discussed  the first part of Assessing Your Financial Situation; Determining Your Net Worth.  Today, we will look at the second part of this topic:

Analyzing Your Cash Flow

Your cash flow is a look at how you spend your money on a daily, weekly or monthly basis.  It shows what comes in, your income, and what goes out, your expenses.  Unlike the net worth statement which is a snapshot of your overall assets and liabilities, the cash flow is more like the running balance on your checking account.

Assessing Your Financial Situation (Part 1)

Today we are discussing the first of six essential foundational components to achieving financial success:

Assessing Your Current Financial Situation

I am an avid roller coaster rider and I love visiting amusement parks.  Occasionally I get turned around in my quest to find the entrance to the best rides at the park.  The first thing I do is look for a map.  Once I find a map, I immediately look for the giant red dot and the words “You Are Here.”  Once I figure out where I am, I can then continue my journey to my desired ride.

Just as maps are useful for finding our physical location, they are also essential when we are on the road towards our financial goals. Before starting your financial journey, it is beneficial if you first figure out where you are.

In order to figure out the ‘You Are Here’ location for your finances you must determine your Net Worth.  Your net worth is simply the value of what you Own minus what you Owe.

Laying A Strong Financial Foundation

Since we are at the beginning of a New Year, a period when many people are setting financial goals, I figured this would be an excellent time to spend a couple of posts explaining how to lay a good foundation to achieve your financial goals.

People employed in the construction industry understand that before any structure can be built, time must be taken to build and lay a suitable foundation.  Without a proper foundation, the structure will not be able to withstand the pressures of gravity, weather and movements of the earth.  It is impossible to build a strong structure on a weak foundation.  This is the principle of foundations.

Weekly Financial Scripture Meditation

Proverbs 24:27, “Prepare your work outside; get everything ready for yourself in the field, and after that build your house.”

There are two words that sum up this scripture as it relates to the subject of personal finance: PREPARATION and ACTION.

The first step towards gaining or maintaining control over your money is to prepare.  This preparation can be in the form of goals and objectives, as well as, budgets and spending plans.  Proper planning helps you identify what you are trying to accomplish and specific steps you need to take to achieve the goals you have set.

Once you have sufficiently planned it is time to take action.  While plans are important, they do not bring success unless they are acted on.

Avoid the trap of over preparing.  Your quest to be totally prepared can easily become a disguise for procrastination.  Realize that you will never be 100% prepared before you take action.  Once you have sufficiently planned, take immediate action.

This week as you meditate on this scripture verse, look for ways to take immediate action towards your financial goals.

Keeping Your New Year’s Financial Resolutions

The New Year is almost upon us.  At some point in the coming days, most people will sit down and make a list of resolutions for the coming year.  Whether it is to stop a bad habit, improve fitness or start doing something positive, the New Year is viewed as a reset button for our lives.

My personal experience with New Year’s Resolutions has taught me that 95% of the time I fail to keep them.  My conversations with friends have led me to believe that the same holds true for most people.  Why do we have such a hard time fulfilling our resolutions?

At their core, resolutions are simply goals.  I don’t seem to have a problem achieving other goals I set during the year.  So what makes my resolutions so different?  After some thought I have come to the conclusion that the key to my failure to implement my resolutions lies in one word, ‘WHY’.  That’s right my success or failure hinges on my understanding of WHY.

Big Banks To Reduce Some Fees

Once again David triumphs over Goliath.  Well, I may be over dramatizing this a bit, but in a rare occurrence, two of the nations biggest banks announced they are voluntarily making significant changes to their debit card programs.

Bank of America and JP Morgan Chase are lowering or eliminating fees, changing the way they process transactions and allowing customers to opt out of automatic overdraft protection programs.  Customers who choose to opt out will not be able to make debit card purchases that overdraw their accounts.

Weekly Financial Scripture Meditation

“The soul of the sluggard desires, and has nothing, but the desire of the diligent shall be fully satisfied.” Proverbs 13:4

We are all born with a desire to want more out of life.  No matter how wealthy or poor we are, no matter how much education we obtain or our chosen profession, there is something in all of us that compels us to want more.  These desires do not necessarily have to be towards money or other tangible goods.  The desire can be for more wisdom, love, internal peace or a host of other emotional attributes.

The truth of the matter is we both succeed and fail in achieving our desires.  Is there a reason why some people obtain more of the things they desire while others frequently fail?  Is there some trait that some people possess which gives them an advantage over others? The answer to this question is yes and that trait is being diligent.

Economic Week In Review

Following is a recap of major economic activity for the week ending September 12:

Dow Jones

Monday Open: 9441.27

Friday Close: 9605.41

Weekly Change: +1.74%

S&P 500

Monday Open: 1016.40

Friday Close: 1042.73

Weekly Change: +2.59%

NASDAQ

Monday Open: 2018.78

Friday Close: 2080.90

Weekly Change: +3.08%